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Court of AppealDismissedCivil Appeal No. 45 of 2017

Emmanuel Musembi Nthambi v Tarmal Wire Products Ltd

Court of Appeal of Kenya
28 February 2018
2,005 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that when a fixed-term employment contract simply expires, an employer's decision not to renew it is not unfair termination and no damages are payable.

What this practically means

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Executive summary

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The appellant, employed casually by the respondent from January 2011 on a daily wage, signed successive three-month fixed-term contracts commencing 1st December 2014 and 2nd March 2015. When the respondent declined to renew the second contract, the appellant sued in the Employment and Labour Relations Court for notice pay, underpayment dues, accrued leave, service pay and maximum compensation for wrongful and unfair termination. Makau J found there had been no termination but only expiry of the contract, dismissed the unfair-termination and underpayment claims, and awarded unpaid leave of Kshs.10,671.15 and service pay of Kshs.9,000 with interest; the judgment was silent on costs. The appellant appealed on three broad grounds: that the Judge erred in finding no termination, in failing to award the other damages claimed, and in making no order on costs. The Court of Appeal re-evaluated the contracts, found them valid and unchallenged below, and held that a challenge to their validity could not be raised for the first time on appeal. It affirmed that the contracts lapsed by effluxion of time and that the respondent's non-renewal was not termination, so no damages for unfair or wrongful dismissal were awardable. Noting there was no cross-appeal, it declined to disturb the leave and service pay awards. On costs, it held that costs follow the event but are discretionary, that reasons should be given for departing from the general rule, and it clarified that the trial Judge had awarded no costs. The appeal was dismissed with each party bearing its own costs both in the Court of Appeal and below.

Key legal issues

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01

Whether the expiry of a fixed-term contract amounts to unfair termination

Holding

Expiry of a fixed-term contract by effluxion of time, with the employer exercising its contractual right not to renew, is not termination and gives rise to no damages for unfair or wrongful dismissal

Reasoning

The court re-evaluated the two signed contracts, found them valid and unchallenged before the trial court. The appellant worked for the stipulated period; the contracts lapsed by effluxion of time and the respondent exercised its contractual right not to renew. Accordingly no termination, fair or unfair, arose and no damages were awardable.

p. 2
02

Whether validity of contracts may be raised for the first time on appeal

Holding

A challenge to the validity of the contracts that was not raised and canvassed before the trial court cannot be entertained on appeal

Reasoning

The appellant never denied signing the contracts or impugned their authenticity before the trial court, and validity was not raised as a ground of appeal. The court held the issue ought to have been canvassed below to allow the trial judge to pronounce himself on it.

p. 2
03

Whether the trial court's silence on costs is reversible error

Holding

Although the Judge failed to make any order on costs, the appellate court declined to interfere, instead expressly recording that no costs were awarded to either party

Reasoning

Costs follow the event but are discretionary and reasons for departure should be recorded. As a first appeal court, it could have made a costs order, but since the claim succeeded only to a small extent, it inferred the Judge did not intend to award costs and merely clarified that none were awarded.

p. 3

Legal principles established

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  • A party may not challenge the validity of a contract for the first time on appeal where it was not raised before the trial court
  • Costs follow the event but remain at the court's discretion, and reasons should be given for departing from the general rule
  • On a first appeal, the Court of Appeal may itself make an order on costs as the justice of the case requires

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Each party to bear its own costs both in the Court of Appeal and in the court below
  3. 3.Express clarification that the learned Judge did not award costs to either party
On appeal from
Employment & Labour Relations Court of the High Court of Kenya at Mombasa
Employment and Labour Relations Cause No. 583 of 2015
Jurisdiction invoked
First appeal to the Court of Appeal under the Employment Act and applicable appellate statutory framework (not expressly stated in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Emmanuel Musembi Nthambi v Tarmal Wire Products Ltd", Case Analysis (2018). Civil Appeal No. 45 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/773/eng@2019-02-28

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.